Ringgit lower despite overnight US dollar retracement

KUALA LUMPUR: The ringgit opened lower against the US dollar today despite a broad overnight greenback retracement with the focus back on sliding crude oil prices and the Organisation of Petroleum Exporting Countries (Opec) meeting this Thursday.

At 9.05am, the ringgit was quoted at 4.3550/3650 against the US dollar compared with yesterday’s close of 4.3350/3450.

Bank Islam chief economist Mohd Afzanizam Abdul Rashid said mixed feelings over possible cuts in oil production, declining Covid-19 fatalities in certain major economies and the overnight drop in major equity indices on Wall Street may see forex markets stay guarded.

“The notion that the economy will not swiftly normalise even though lockdown measures are lifted also suggests risk aversion would continue to prevail,” he told Bernama.

“In that sense, the ringgit is expected to stay weak against the US dollar between RM4.35 and RM4.37 as investors would stay guarded, preferring safe-haven currencies.”

Meanwhile, AxiCorp global chief market strategist Stephen Innes said the ringgit remained tethered to the oil price yo-yo as ears and eyes hone in on the Opec meeting.

On another note, the outlook remains slightly positive because of the government’s stimulus efforts and signs that the Covid-19 crisis is abating in some hot spots around the world, he said.

“But more important in this view is that China is coming back to life, so there should be a decent export market awaiting the Malaysian industry when the people emerge from the MCO,” he said.

The ringgit was traded lower against a basket of major currencies.

It decreased vis-a-vis the euro at 4.7343/7469 compared to 4.7173/7291 on yesterday’s close and fell against the Singapore dollar to 3.0527/0608 from 3.0415/0496.

The local unit slipped versus the Japanese yen to 4.0053/0156 from 3.9723/9826 and depreciated against the British pound to 5.3654/3794 from 5.3376/3526.